BofA, Others Finance KapStone Acquisition of Longview Fibre
KapStone Paper and Packaging announced that it completed the stock purchase of Longview Fibre Paper and Packaging. Funding for the acquisition came from borrowings under the $1.675 billion amended and restated senior secured credit facility led by Bank of America, Barclays Bank and Well Fargo Bank.
The amended facility now consists of term loan A-1 of $805 million maturing over five years; term loan A-2 of $470 million maturing over seven; and a $400 million revolving credit facility.
Under the terms of Longview’s existing $480 million, 8% senior secured notes, current noteholders will be notified shortly regarding redemption of the notes, including a 4% change of control penalty. The redemption is expected to take 30 days.
Longview, headquartered in Longview, WA, is a manufacturer of containerboard, lightweight high performance multiwall paper, specialty Kraft papers, and corrugated products.
“Today we are welcoming Longview’s team as the newest members of KapStone,” stated Roger W. Stone, chairman and chief executive officer. “The Longview team orchestrated a transformation that is truly, in my experience, the most amazing that I’ve actually ever seen in my 55 years in the industry. We’re thrilled and delighted to officially have them with us.”
Matt Kaplan, KapStone’s president and chief operating officer, further stated, “Longview continues to demonstrate their excellence by delivering outstanding results. In the second quarter, Longview’s revenues and adjusted EBITDA of $228 million and $49 million, respectively, yielded an adjusted EBITDA margin of 20.7 per cent, one of the best in the industry. Even more notable was that they achieved these results despite incurring $4.3 million of expense for their once every five year planned mill maintenance outage performed in April. June was particularly strong as adjusted EBITDA for the month exceeded $19 million benefitting from the partial implementation in the quarter of the $50 per ton containerboard and associated box price increases.”
Northbrook, IL-based KapStone Paper and Packaging is a North American producer of containerboard, unbleached kraft paper products, and corrugated products.